Multi-billion dollar funding rounds for OpenAI and Waymo lifted the dollar value of CVC-backed rounds to levels last seen in 2022. But there's an underlying rise in deal numbers, too.
The dollar value of corporate-backed startup funding rounds spiked to their highest level in more than two years, boosted by a handful of mega deals.
Multi-billion dollar funding rounds for OpenAI and Waymo helped boost dollar values to $22.33bn, a 134% increase over October 2023’s $9.53bn. This is a level of spending last seen in 2022 at the end of the recent VC boom.
Though the OpenAI and Waymo deals may be one-off and outliers, there was also an increase in the number of fundraising rounds that corporate investors participated in, indicating an overall pickup in the market.
There were 376 corporate-backed rounds for startups in October 2024, a 27% rise from the 304 deals seen in the same month last year.
The value of October’s funding rounds was significantly boosted by two oversized rounds. The largest was generative AI company Open AI, which raised $6.6bn from backers that included SoftBank, Microsoft and Nvidia. The company will use the funds towards furthering its research on AI research, building tools and increasing computational capacity.
Self-driving startup Waymo also raised a $5.6bn round in October, led by Alphabet and the funds will be used to develop to company’s robotaxi service Waymo-One.
Corporate-backed funding rounds in the US hit a two-and-a-half-year high
The rise in corporate-backed funding rounds was largely driven by the US, where such deals reached the highest numbers since April 2022, according to GCV data. It is further evidence that the US market may be starting to recover from the post-covid dip.
Most of the largest corporate funding rounds were for US-based startups. In addition to OpenAI and Waymo, six other US companies raised corporate-backed rounds of more than $300m in October. Joby Aviation, a US-based electric aircraft producer, for example, raised $500m in a round that was backed by Toyota, among other investors.
In other major geographies, Israel and Singapore saw corporate-backed rounds rise and so did the UK and Japan, while Canada, China and Germany saw slight dips in numbers.
Artificial intelligence
Open AI was not the only artificial intelligence company raising a round. On the other side of the Atlantic, Poolside, a French AI coding software developer, meanwhile, raised $500m in a series B round that featured a host of corporate investors: Nvidia, HSBC, Capital One, LG Technology and eBay.
Logistics sees uptick in corporate interest
The area of logistics and supply chain technology also saw some rising corporate interest in October. There were eight corporate-linked funding rounds within this subsector, compared with just two in the same month last year.
A notable funding round within this space went to Nimble, a US-based autonomous fulfilment company. It raised $106m in a series C round, co-led by logistics company Fed-Ex. Outrider, another US-based company that automates yard operations for logistics hubs with an integrated system, raised $62m in series D funding. The round was led by American conglomerate Koch and included other corporates Nvidia and Prologis.
Many sectors saw an increase of activity, the most significant being the consumer sector which had a 79% increase in corporate-backed deals. The only sectors to see a decrease were media and services.
Notable deals within the consumer sector included South Korea-based AI-driven fashion recommendation e-commerce platform Ably, which raised a $72.4m series D round backed by Alibaba. There was also Japan-based online gifting service Giftmall, which raised $26.5m in a series B round backed by management consultancy Proto (via Proto Ventures) and consumer electronics retailer Yamada.
